To avoid defaults due to the reduction in income derived from the pandemic, the legislator established several types of moratoriums or deferrals in the payments of certain loans: lRDL 8/2020 and 11/2020 for mortgage and personal loans for individuals, supplemented by RDL 19/2020 on conventional moratorium; and RDL 25/2020 and 26/2020 for tourism companies and road passenger transport companies. These moratoriums were covered by the agreements of the European Banking Authority (EBA for its acronym in English), which allowed banks not to make provisions in certain cases of deferral to debtors. The EBA has been extending the application period (initially until 6/30/2020, then until 9/30/2020, and now until 3/30/2021) which has allowed the present extension of these moratoriums for the RDL 3/2021 that is studied here.
The basic content of the RDL consists of extending the application period until 3/30/2021 and modifying the maximum period of suspension of quotas up to nine months for both legal and conventional moratoriums, the maximum period from which must be deducted that of the moratorium that would have been enjoyed before. I limit myself here to explaining how the moratoriums for natural persons remain after this reform, distinguishing between legal moratoriums on mortgage and personal loans, and conventional moratoriums (scheme taken from this article written with Lucas Braquehais).
The legal moratorium on mortgage loans: Applies to mortgage loans and credits for the acquisition of a habitual residence, of real estate affected by the economic activity of businessmen and professionals, and of secondary dwellings in respect of which the tenant has obtained the rent moratorium of RDL 11/2020. Since it aims to “guarantee the right to housing for mortgage debtors in a particularly vulnerable situation”, Should be applied in my opinion to any loan or credit that burdens the debtor’s habitual residence, even if its purpose was not to acquire it.
Only economically vulnerable debtors can request this moratorium, who must jointly meet four circumstances: that they have become unemployed or, if they are a businessman or professional, that their billing has been reduced by at least 40%; that the income of the Family Unit is less than 3 times the IPREM, with extensions according to the number and situation of its members; that the sum of the mortgage payments plus the basic expenses and supplies defined by the Law is greater than or equal to 35% of the net income of the family unit; and that the effort to access housing (mortgage payment / family income) has increased by 30% or more (a more detailed study of the requirements here and in this article from Rivas y Cabanas.
The deadline for requesting the moratorium had expired on 9/30/2020 and the RDL now grants a new period until 3/30/2021, both for those who have not previously requested any moratorium and those who have enjoyed a.
The effect of the legal moratorium is the suspension of payments both capital and interest, lengthening the total repayment period for the same period of this suspension and maintaining the range of the mortgage. This period was fixed at 3 months, but now art. 7 RDL 3/2021 establishes that the new moratorium can be requested for a maximum period of nine months, from which the moratorium obtained will have to be deducted, where appropriate. The problem is that RDL 3/2021 does not modify the previous RDL that continue to speak of a 3-month moratorium. Does that mean that the new legal moratoriums are still 3 months, since the new rule only speaks of maximum? I understand that no and that the new legal moratorium is up to nine months. This is the result of the preamble, which speaks of the period of 9 months for “any moratoriums” and that otherwise it would not make sense to speak of a legal moratorium of up to nine months, since only 3 could be added to the 3 already obtained. The same is deduced from the note issued from the government (on here). It also follows from the wording that now the moratorium term is no longer fixed but will depend on what the debtor requests, always within a maximum of 9 months, reduced where appropriate by the term of the moratorium that has already been obtained. Therefore, those who have not obtained a moratorium can request one for up to 9 months, and the others for up to 6 months. The term is computed for each loan, that is, if I have several loans to which I can apply the moratoriums, in each of them I can have a maximum of nine months of moratorium. The request must be submitted with the documents specified in article 17 RDL 11/2020 (in more detail here).
The legal moratorium on personal loans: RDL 11/2020 added the moratorium for loans or credits without mortgage guarantee to natural persons, and RDL 19/2020 clarified that it included financial leasing contracts or “leasing”.
The debtor’s vulnerability requirements are the same as for the mortgage moratorium, with the only difference that to calculate the ratio of the installment to income and the increase in effort, the rule provides that the installments of the personal loan and the rental income or the mortgage loan installment, even if they are entitled to a moratorium on them. Therefore, it is possible to accumulate the two moratoriums if one is in a vulnerable situation. To reach the thresholds of the mortgage default, however, the installments of personal loans cannot be added.
The application requirements and the effects of the moratorium are the same as for the mortgage moratorium that we have just seen, and therefore a legal moratorium of up to nine months can be requested (discounting the one already obtained).
Let us remember that these legal moratoriums can also be obtained by guarantors and guarantors who meet the vulnerability requirements, who can also “demand that the entity exhaust the principal debtor’s assets”, even if it had been agreed -as in practice is always done- the character solidarity and / or waived the benefit of excursion.
Conventional or sectoral moratoriums. The legal moratoriums leave out many middle-income families who also have severe payment difficulties as a result of COVID. For this reason, and also under the protection of an EBA guideline, the banking associations adopted sectorial agreements for their application to loans and mortgages on homes or on real estate related to the economic activity of the self-employed and to loans. The debtor must be a natural person, not have previously defaulted and have financial difficulties as a result of COVID, without establishing other vulnerability requirements. It also applies to debtors who are entitled to the legal moratorium once it has been exhausted, if they had requested it within the term of the sector agreement. Although adherence to the agreement is voluntary, practically all financial institutions have joined (see the Bank of Spain website). It must be requested with the documents required by each entity, now until March 30, and the bank must reply within thirty days. LA fundamental difference from the sectoral moratorium is that it only supposes a deficiency in the payment of capital, without suspension of accrual and payment of interest, but the term could be up to 12 months for mortgage loans and 6 for personal loans. The effect of this deficiency may be, at the option of the debtor, to extend the term of the loan for the period that the capital installments have been suspended, maintain the original term by distributing that capital among the remaining installments. RDL 19/2020, of May 26, established for these conventional moratoriums the exemption of AJD, tariff reductions and facilities for their formalization, but conditioning these advantages on not modifying the interest rate or new expenses, nor requiring new products combined or warranties (with a few limited exceptions).
These moratoriums can now be requested until 3/30/2021, and a maximum of 9 months is established, from which those that have already been consumed from a previous moratorium will also have to be deducted. As the RDL cannot modify the sector agreement, it seems that in the case of personal loans the maximum term will continue to be 6 months, with the limit of 9 if a previous one had already been granted.This 9-month limit raises the question of what It happens with those already granted (only for mortgage loans) for a longer term, clarifying DT 1 of RDL 3/2021 that they will maintain their conditions and duration.
The relationship between the legal and conventional moratorium was also regulated in RDL 19/2020, providing that in the first place the legal one will be applied if the debtor had the right to do so, and only once its term expired would the conventional one be effective, which now normally it will not happen if the legal moratorium is requested for 9 months, which is now also the maximum term of the conventional one.
As we see, the novelties are few but they have important practical effects. It must be taken into account that many people could not be in a situation of vulnerability in previous periods and are now, being able to take advantage of this new opportunity to obtain legal moratoriums. In addition, the extension of the term is very significant for the legal moratorium, since it goes from 3 to 9 months. In the case of the conventional moratorium, the term is reduced from 12 to 9, but it does not affect those already granted and implies the possibility of requesting the moratorium for those who previously did not need it and now do. Debtors in difficulties have all this first quarter to request the moratorium. The measure is therefore very welcome and we can only hope that the health and economic situation does not force new extensions.
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